- Xapo Bank becomes the first-ever fintech to utilize Tether (USDT) infrastructure for transacting in U.S. dollars, displacing SWIFT.
- The shift to Tether, fully compliant with MiCA standards, reflects in USDT’s market cap, which recently hit a record $83.6 billion.
Leading the way in digital banking transformation, Gibraltar’s Xapo Bank has become the pioneering financial institution to replace the traditional SWIFT system with U.S. Dollar Tether (USDT) for transferring U.S. dollars between accounts. This groundbreaking integration, satisfying the requirements set by the Markets in Crypto-assets (MiCA) regulation, illustrates a significant shift in financial operations.
GIBRALTAR-BASED BANK XAPO LAUNCHES USD ACCOUNTS ON TETHER RAILS INSTEAD OF SWIFT
We are going to see more of this. Tether improves on the banking system.https://t.co/oqRgZ7ERQc
— Gabor Gurbacs (@gaborgurbacs) June 5, 2023
Xapo Bank’s move to Tether, the popular stablecoin, represents a paradigm shift within the financial sector. The banking entity has emerged as the first regulated institution to transition from the SWIFT system to the “stablecoin rails”. The switch marks a move towards quicker, more transparent, and resource-efficient operations.
Xapo Bank’s CEO, Seamus Rocca, underscored the significance of this integration not just for Xapo Bank, but for the broader banking sector in Europe and beyond. He lauded this unique offering that marries the compliance and security of a traditional bank with the efficiency, speed, and extensive usage of USDT. Rocca emphasized Xapo Bank’s dedication to eradicating the often time-consuming and expensive deposit and withdrawal procedures associated with conventional banks, thereby offering a seamless banking experience for their members.
Interestingly, Xapo Bank had earlier integrated the USD Coin (USDC), developed by Tether’s key competitor, Circle Inc., in a similar fashion. The exchange rates between USD and both these stablecoins remain fixed at 1:1.
The Tether (USDT) integration has led to an all-time high in its market cap, with the circulating supply now exceeding $83.6 billion across several blockchain platforms. This means that Xapo Bank users can now leverage the stablecoin infrastructure to earn yield on their holdings.
While Xapo Bank’s move represents a noteworthy departure from traditional banking operations, it remains fully compliant with the MiCA framework, a recently introduced EU regulation on digital assets. In effect, the bank’s adoption of Tether symbolizes a forward-thinking approach to improving financial transactions while ensuring regulatory compliance.
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